P3 Cost Comparison Infographic

Regina Water War - Referendum 2013Ever have one of those days where you sit down planning to do a quick little project that you reckon will be fun and easy and won’t take up too much time and then the next thing you know… boom, you’ve blown, well, hours and your whole family is thinking maybe you’ve had a psychotic break because you’re swearing at your computer like it’s a poorly performing sports team or a politician?

That’s me today. I decided to whip up a quick infographic about the sewage plant because I’ve been having trouble wrapping my head around all the frickin’ numbers that have been flying around and I thought I could put together something that would be a handy reference for other stuff I’m writing and that might give me a sense of the scale of everything.

Well, I finished it. And I’m posting it below along with explanatory notes. And it’s huge so beware…

WWTPcomparisons

Okay, I got tired of wrestling with Illustrator to get more text on this thing so I’m going to write up some additional info here to make the graphic easier to understand:

• The Quaatloos are grouped into small groups of five (that’s $5 million) and larger groups of ten (that’s $10 million).

• Combine the green boxes to get the total cost of the project over 30 years.

• Combine the yellow boxes in the left hand column to get the three sources of funding that cover the cost of construction.

The little yellow box in the right hand column is how much Mayor Fougere claims we’ll be saving on operation and maintenance bills over 30 years if we go with a P3. Why I put that box in yellow, I’ve no idea. It makes it confusing. My apologies.

• BUT! if you combine the little yellow box in the right hand column (savings on operations and maintenance) with the first yellow box in the left hand column (the federal contribution from the P3 Canada Fund) you get a value ($78.5 million) that’s a little more than what Deloitte says we’ll be saving by going with a P3 instead of a DBB procurement ($76.9 million). Is that a coincidence? I don’t know.

The little blue boxes represent two different costs of private financing: The larger box is the high end of what Regina Water Watch says we will pay to cover the cost of borrowing through the Sewage Consortium. They get their number from the Mackenzie report which estimates a private company could borrow for as much as 2 per cent more than the city could. The smaller box is based on the low end of what Mayor Fougere claimed in the Gyro Club debate that private companies will borrow for. That night, he said that the gap between private and public borrowers was narrowing and that the Sewage Consortium could be borrowing for between 1 and 0.5 per cent more than the city could. So I based the info graphic on the low end of his projections so you’d get a range of what the private borrowing could cost. It’s worth noting though that Hugh Mackenzie claims that private companies could end up borrowing for considerably more than 2 per cent more than the city, but as he went with the 2 per cent number in his analysis, I used it here.

The large red box is the utility rate money that will pay off the operations, maintenance and debt servicing over the 30 years of the project. So it goes against the large green box in the right hand column.

• The total cost of the stadium is in the beige boxes and it is also for the 30 years of the project.

• The $340,000 the city spent on advertising the No side was a mere fraction of a Quaatloo so it didn’t make this infographic.

• No, I don’t know if Quaatloos are actually worth $1 million. I’ve never been to Triskelion so I don’t know how far a Quaatloo will take you.

• I pulled all my figures from the Deloitte and staff reports that went before council on February 25, and from the update to the Hugh Mackenzie report that’s noted on the Regina Water Watch site and from assertions made by Mayor Fougere during the Gyro Club debate. I realize that some of these sources are perhaps less up-to-date and reliable than others but this infographic should only be used for entertainment purposes. Anyone who uses this infographic to bolster their referendum argument or to negotiate a P3 with a consortium of water companies does so at their own risk.

Anyway…

I think the take-away on this should be, Wow, that $58.5 million from the feds that everyone has their knickers in a knot over is frickin’ chump change when you compare it to the overall size of the project. I mean, it’s a quarter of the construction cost, sure. But the cost of construction is dwarfed by the cost of maintenance, operations and debt servicing.

Actually, all the dollar values that people are stumbling over seem pretty tiny on their own – the P3 Canada Fund money, the money from the Utility Reserve, the extra cost of private borrowing… What does seem huge is the amount that we’re all going to pay over the next 30 years for this plant through utility fees. That’s a fucktonne of money and it’s coming out of our pockets over the next generation.

And once you consider the scale of investment we’re making, nobody had better begrudge us a moment to reflect on it through the lens of a referendum. I’d say we’re earning it.

Also, look at how the cost of building the stadium is higher than the cost of building the sewage plant. But, the cost of maintaining, operating and paying of the debt of the stadium is considerably lower than the cost of the same for the sewage plant.

So… the comparatively expensive part of the stadium is the part we’re building with a P3. But the comparatively less expensive part of the stadium is the part we’re going to be managing and maintaining ourselves.

Meanwhile, the whole sewage plant project is going to be handled through a P3.

I’m sure all that means something really, really important but I’ll be damned if I can figure it out right now. Anyone else want to weigh in? There’s a comment section below.

Okay, beyond that, I don’t think there are any really magnificent insights that this infographic reveals — that is, beyond: the feds… fuck ’em. I’d be inclined to think this was a big waste of time except it gave me a chance to recycle the Quaatloo gimmick from my P3 piece in the paper. And maybe my standards are dropping but that’s enough for me today.

* * * * *

UPDATE: Oh yeah, something else I meant to bring up was that $20 million in savings the Mayor talked about at the Gyro Club debate — that’s the small yellow box in the right hand column. He claimed that’s what we’ll save on operations and maintenance if we go with a P3 instead of a DBB. I hunted around for corroboration on that and couldn’t find anything. Like I say in the footnote in the image, that doesn’t mean it isn’t in some report somewhere, it just means I can’t find it.

Still, it’s an odd number to crow about. Again, $20 million might sound like a lot of money but even if it’s for real, so what? Operations, maintenance and debt servicing for 30 years is $760 million so $20 million represents just 2.5 per cent of that. And it works out to only $666,667 in savings a year. Seems to me that on a project of this size that’s peanuts.

Author: Paul Dechene

Paul Dechene is 5’10” tall and he was born in a place. He’s not there now. He’s sitting in front of his computer writing his bio for this blog. He has a song stuck in his head. It’s “Girl From Ipanema”, thanks for asking.

You can follow Paul on Twitter at @pauldechene and get live updates during city council meetings and other city events at @PDcityhall.

6 thoughts on “P3 Cost Comparison Infographic”

  1. Good work Paul.

    I can’t stand these arrogant under handed so called leaders at city hall.
    Councillor Fraser – you of all people, are buying into this P3 c**p?
    What are you afraid of?
    You still have time to stand up to this before it’s to late,

    Regina, vote YES September 25th …

  2. Just FYI, former councillor Fred Clipsham, in a letter to the Leader Post about a week and a half ago, also supported the P3 option. He represented the same ward that Councillor Fraser does now. Hmmmmmm.

  3. Paul, I say this with all the love and respect my dark little heart can muster…

    Please do not, under ANY circumstance whatsoever, come up with a graphic representation of anything.

    Ever.

    Again.

    Thank you.

  4. Paul – how many quaatloo’s extra do we have to pay as profit to the corporation that will run the plant for 30 years? Wouldn’t that be the biggest block by far?

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